Bankruptcy Intentions

: Reese Baker & Associates

  Filed under: bankruptcy

The purpose of bankruptcy is to give honest, hard-working people a chance to get debt relief and get a fresh start. The majority of Americans filing bankruptcy use this as a last resort to keep their homes or their vehicles.

A common misconception is that people that file bankruptcy either squandered their money or bought lots of stuff they couldn’t afford. When, in fact, most of the time, people that file bankruptcy do so because they were hit with an unexpected financial hardship. Either through the loss of a job, the loss of a breadwinner through divorce or death, an unexpected medical bill, or bad financial habits. Bankruptcy is more geared towards consumer protection rather than for credit card companies.


The bankruptcy laws were written to prevent abuse and fraud. The court does not take a favorable view on people who max out their credit cards and then file bankruptcy to get out of making payments.

Payment Plans

Your creditors would prefer that you do not file bankruptcy so you can continue to make the payments with interest. Credit counselors often advise consumers to make payment plans and discourage bankruptcy because of the damage it will do to your credit. Credit counseling agencies receive part of their income from banks and credit card companies, so it is often in their best interest to get you to sign up with a payment plan. If you fall behind on your payments again, you will have to start all over. Whereas if you file bankruptcy that debt will be eliminated, and you will have more freedom with your finances.

If you would like more information about bankruptcy contact a Houston bankruptcy attorney.